The “Worrying” Sweden Channelisation Rates

Recent findings show that many Swedes gamble at non-licenced offshore casinos as opposed to licensed Swedish online casinos. The Swedish government has still not met its desired target of 90% channelisation to regulated online casinos. In this article, we will explore the worrying Sweden channelisation rates and the government’s efforts to curb illegal online gambling.

The Current Sweden Channelisation Rates

The Swedish government is highly aware of the problem of unlicenced gambling operators and their popularity among Swedish players. Unfortunately, it seems like the issue is far from being resolved as evidenced by the latest research conducted by the Aktiebolaget Trav och Galopp’s.

Aktiebolaget Trav och Galopp’s (ATG) is the main provider of horse race betting in Sweden and it’s owned collectively by Svensk Travsport, the association of Swedish trotting sports, (90% of shares) and Svens Galopp, the association of Swedish galloping sports (10% of shares).

According to the ATG’s March 2024 research, the Sweden channelisation rates (channelling players from unlicenced to licenced online gambling operators) for Q4 are between 69%-82%.

While the ATG reports that the channelisation rates have increased in comparison to Q3, the improvement is apparently insignificant. The ATG believes that it’s unlikely for the channelisation rates to hit the 90% mark, as desired by the Swedish government.

Apparently, traffic to unregulated online casinos and sportsbooks has increased ten times since 2019, so the government has quite the big task when it comes to channelisation to legal gambling operators.

Again, drawing on the latest ATG research, the company found that the 20 most visited unlicenced gambling operators do not appear on the blacklist of Spelinspektionen, also known as the Swedish Gambling Authority or the main regulator of gambling in the country. Additionally, 19 out of these 20 sites had the same platform providers as licenced Swedish operators.

Now that we know more about the worrying Sweden channelisation rates, we will go on to explore the reasons behind illegal gambling in the country and the proposed solutions to it.

Reasons Why Swedes Gamble at Offshore Sites

Let us begin by saying that online gambling is fully legal in Sweden, so players can easily register for a licenced gambling operator provided they are over the age of 18. However, that has not always been the case. Sweden only began regulating online gambling in 2018 with the introduction of the Gambling Act and the Gambling Ordinance in June 2018.

Before these legislative changes, Swedes could only gamble at offshore casinos and sportsbooks. Perhaps one of the reasons why Sweden is still struggling to improve its channelisation rates is because it hasn’t had a regulated online gambling industry for very long.

Still, it’s rather puzzling that the traffic to unlicenced gambling operators has increased tenfold since 2019. On the other hand, the Swedish government did not make it very easy for gambling operators to apply for licences.

The Swedish Gambling Authority has very strict requirements for potential applicants whereas they have to submit and verify information on 20 different points in Swedish, and they must all have a Swedish representative. Additionally, businesses must pay a corporate tax of 22% and a gambling tax of 28%.

Apparently, not that many online gambling providers can satisfy these requirements and many are also unwilling to pay the high taxes. Based on the registry provided by the Swedish Gambling Authority, there are currently 55 licenced online casinos and most of them are Swedish with only a few big international gambling providers.

What this means is that Swedes don’t have access to some of the most popular online casinos which is another reason why they might choose to bet at unregulated sites. It should be noted, however, that while Swedes colloquially call them “unregulated”, many of these providers are regulated by other gambling authorities such as the UK Gambling Commission or the Malta Gaming Authority.

Some Swedes choose to gamble at sites unregulated by the Swedish Gambling Authority because there is greater game variety and better bonuses. According to the Gambling Act of 2018, regulated Swedish casinos and sportsbooks may only offer bonuses up to SEK 100 or the equivalent of 8.50 euro. It makes sense why some Swedes choose offshore casinos that give them bonuses in the hundreds and thousands.

Not only that, but the Act also limits the amount a player may deposit at an online Swedish casino or sportsbook. Swedish players can only deposit SEK 5,000 per week (or 430 euro) which greatly impacts the number of games one can play.

Last, but not least, come taxes. While players must report winnings from regulated Swedish casinos and pay taxes on them, they naturally don’t have to do that when they gamble at offshore casinos.

Solutions to Unregulated Gambling

The ATG, which conducted the channelisation research and itself conducts online gambling operations, asked Swedish banks to reject transactions to unregulated online casinos and sportsbooks.

This request is similar to the existing US gambling law banning American banks from processing offshore gambling transactions. Apparently, ATG’s research showed that seven of the most popular 20 offshore gambling operators in Sweden accept payments from Swedish bank accounts.

However, while this potential ban might slightly decrease the number of Swedes who play at offshore operators, online casinos and sportsbooks offer many more payment methods, like Bitcoin and PayPal, that cannot be easily tracked.

Based on the ATG’s statement that the 20 most popular offshore sites are not blacklisted by the Swedish Gambling Authority, one can see the implication. The ATG is essentially asking the regulator to ban traffic to these sites.

Bans rarely work though. The US is the prime example; while the country famously banned most forms of gambling many times during its history, Americans still found a way to gamble, but unfortunately, some became prey to scams due to the lack of regulatory oversight.

Instead of finding what else to ban, the Swedish government can perhaps rethink its gambling legislation. The first step could be a relaxation of the requirements towards potential gambling operators, so new operators can join the legal market and bring more money in taxes.

In regards to taxes, the Swedish government can lower the taxes for both operators and players. Additionally, it would be best if Sweden removed or increased deposit limits and bonuses. All of these proposed solutions would likely boost channelisation more than bans; blacklisting should be reserved for actual scam sites.

Conclusion

Channelisation efforts are still ongoing in Sweden but the problem might only worsen if the government doesn’t act. Sensible changes to Swedish gambling legislation, rather than outright bans, may help Sweden reach the coveted 90% of channelisation faster.

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